A Behavioral Approach to Learning in Economics - Towards an Economic Theory of Contingent Learning

In economics, adjustment of behavior has traditionally been treated as a "black box." Recent approaches that focus on learning behavior try to model, test, and simulate specific adjustment mechanisms in specific environments (mostly in games). Results often critically depend on distinctive assumptions, and are not easy to generalize. This paper proposes a different approach that aims to allow for more general conclusions in a methodologically more compatible way. It is argued that the introduction of the main determinants of learning behavior as situational restrictions into the standard economic model may be a fruitful way to capture some important aspects of human behavior that have often been omitted in economic theory. Based on a simple model of learning behavior (learning loop), robust findings from psychology are used to explain behavior adjustment, and to identify its determinants (contingent learning). An integrative methodology is proposed where the "black box" is not opened, but instead the factors that determine what happens inside, and the limits imposed by theses factors can be analyzed and used for model building. The paper concludes with testable hypotheses about learning behavior in the context of economics.